Huawei Makes First Court Appearance In Trade Secrets Case

Huawei's day in court has finally arrived.

As analysts struggle to parse what the failed US-North Korea summit means for China trade talks (could it possibly strengthen Beijing's hand by pressuring Trump to pull punches in the hopes of winning support for a deal with North Korea?), Huawei is preparing to appear in a Seattle Courtroom on Thursday, where court proceedings on charges that it stole trade secrets from T-Mobile are set to begin.

Huawei

Here's more from Bloomberg:

China’s biggest smartphone maker and its U.S. affiliate are set to appear in federal court in Seattle at 9 a.m. to face charges that they engaged in a scheme to steal trade secrets from T-Mobile US Inc. They are expected through lawyers to plead not guilty to trade-secret theft, wire fraud and obstruction of justice.

One day later, a Canadian court must decide whether the company's CFO, Meng Wanzhou, should be extradited to the US, where she is wanted on charges of fraud and sanctions violations. If it rules to begin the extradition process, that will set in motion a legal proceeding that could take months or even years.

The arraignment comes just a day before Canada’s deadline to decide whether to officially order the start of extradition hearings against Huawei Chief Financial Officer Meng Wanzhou, who is wanted in the U.S. on fraud charges. In a separate indictment filed in Brooklyn, U.S. prosecutors allege she lied to banks to trick them into processing transactions for Huawei that potentially violated Iran trade sanctions.

According to BBG, history suggests that Canada will approve extradition.

If history is any guide, Canada will probably start extradition proceedings, which will set in motion a process that promises to be long and politically explosive. China has demanded that Canada release Meng and, since her December arrest in Vancouver, has detained two Canadians on national security grounds and sentenced a third with a death sentence for drug trafficking in China.

Meng, meanwhile, won't appear in court again until March 6.

The case against Huawei in Seattle revolves around whether Huawei stole technology from T-Mobile headquarters in Bellevue, specifically regarding its robotic phone-testing system, a robot hand nicknamed "Tappy."

The US says it has evidence, including e-mails, showing that Huawei encouraged its engineers to steal technology from US firms.

In the trade-secrets case, prosecutors said in a January indictment that from 2012 to 2014 Huawei stole information from T-Mobile’s Bellevue, Washington, specifically technology related to T-Mobile's phone-testing robot, Tappy.

The U.S. says it uncovered Huawei email messages showing it offered bonuses to employees for information stolen from companies worldwide. Huawei faces fines of more than $5 million, or three times the value of T-Mobile’s secrets, according to the government.

The company has denied any wrongdoing and said it expects to be found innocent in court.

Prosecutors and lawyers for the company may discuss Thursday what pretrial information sharing they’ve done or is required, schedule the next hearing, and possibly set a trial date.

Robert H. Westinghouse, James F. Hibey and Brian M. Heberlig have indicated in court filings they will represent Huawei.

The case is set to begin at 9 am Pacific Time. Of course, if Beijing gets the sense that US prosecutors are seeking to throw the book at Huawei (particularly as the US has largely failed in its efforts to convince western allies to abandon Huawei technology), that could potentially disrupt the trade talks.